Family Business Challenges

An introduction to the main family business concepts, defining where and how family firms are distinctive. How to plot your family firm’s stage of development, plus the varying and often overlapping roles, motivations and expectations of family members.

• Understanding Family Business

Defining a shared family business vision and articulating your family values. How values can guide the firm through transitions as well as help to shape decision making, both by the owners and in the business.

• Maintaining Family Values

Building and passing down an enhanced legacy to future generations. Leveraging family, people, financial and social capital to drive performance. Addressing reinvestment in the business while considering shareholder liquidity needs.

• Developing Stewardship

Developing the next generation’s interest in the business in preparation for assuming ownership and/or management roles. Providing space for the next generation to learn, develop and engage while making their own choices.

• Engaging the Next Generation

Examining the process of generational transitions. Anticipating ownership and management issues related to succession planning. Asking if the next generation are ready, willing and able – as well as should the business be family owned?

• Planning Succession

The twin facets of family business governance; corporate and family governance. Delineating decision making for the owners and the business respectively. Protocols, structures and procedures to help the family speak with one voice.

• Building Family Governance

Recognising the natural risk of conflict and highlighting its common causes. Identifying foreseeable challenges and creating a family business conflict prevention environment, including strategies for managing the associated risks.

• Managing Differences

Owners don’t necessarily manage the business but they carry many other responsibilities. Recognising the different perspectives of “insider” and “outsider” shareholders. Developing a responsible ownership culture while enabling exits.

• Fostering Responsible Ownership

Communication is critical, particularly as time passes, putting a premium on developing shared purpose. Drawing up a family strategic plan including family meetings, setting agendas and using external facilitation where appropriate.

• Strengthening Family Communication

Building a balanced family business board including owner representatives, with criteria for their appointment, non-family talent and independent directors. Organising the board to establish a collaborative working culture.

• Professionalising the Board

Structuring dialogue between owners and the board. Establishing role clarity over areas where the owners have final control. Promoting a culture where messaging is consistent and supported by defined channels of communication.

• Enhancing Communications with the Board

Considering when to appoint a family business adviser. Defining a project brief to address the family’s needs. Recruiting advisers, ensuring family buy-in, and maximising the outcomes in terms of learnings and practical recommendations.

• Employing Advisers

Risk taking balanced with stewardship can underpin competitiveness. Promoting a culture that fosters entrepreneurship and innovation. Developing adaptability, balancing the past and future, to support growth and renewal.

• Fostering Entrepreneurship

Ensuring a balanced approach to long-term orientation (LTO) while keeping sight of short-term performance. Leveraging the benefits of patient capital. Promoting the drivers of LTO and considering the balance in terms of asset portfolio.

• Embedding Long-term Orientation

Developing a purpose-led business where – through the careful management of human, natural and social capital – sustainable value is created. Building trust with stakeholders through a sustainable business approach.

• Promoting Sustainability

Recognising the distinctive feature of family firms around human resources. Creating a strong employee brand to enhance recruitment and retention of non-family talent, and defining appropriate reward strategies.

• Maximising People Capital

Considering when to put the family brand at the centre. Building a tailored strategy with critical success factors to maximise the family branding benefit. Bringing the family brand to life, including roles family members can play.

• Branding the Family Business

Evaluating reasons for selling, including consideration of options for a full or partial exit. Managing expectations among owners and building a consensus. Looking beyond the watershed for a future without the family business.

• Selling the Family Business

This Family Business Challenges guide provides evidence based guidance for family-business owners and their advisors on inter-generational business ownership and wealth transfer. It focuses on the justice (fairness) dilemmas that can arise in inter=generational ownership and wealth transfer decisions.

• Justice in Ownership and Wealth Transfers